John Greene - Cardano for the Masses: Vasil Edition

Anyone who doubts the adage the truth is stranger than fiction should look at the history of money. they run on, are just the latest twist in a long and colorful story.

To understand a third-generation blockchain such as Cardano, we must first review its predecessors. The first generation is Bitcoin, whose goal was to create decentralized money. Could there be a scarce, tradable token that lived on some sort of decentralized blockchain maintained by people all around the world?

This wasnt a new pursuit. Bitcoin happened to be the breakthrough, but it was built on previous attempts. The idea of Bitcoin started in the 1980s, with a lot of ideas coming from the cypherpunk movement. Ecash preceded DigiCash with pioneering work from Hal Finney and David Chaum. During the 1990s and into the early 2000s, Nick Szabo proposed the bitgold system. There were other contributing factors like the technological advances of the Arm chip powering smaller devices, making processing possible.

In 2008, Bitcoin was just a pipe dream in the form of a white paper. attracted a lot of brilliant minds.

From early supporters such as Hal Finney to Martti Malmi, many others flocked over the years as Bitcoin grew from a few crypto anarchists on a mailing list, to a global movement. All this despite no marketing budget, with a logo provided by a forum user with the name Bitboy. Bitcoin has since proven its resilience. It has been declared dead countless times and endured many crashes. It has lost many of its early contributors. Developers such as Mike Hearn and Gavin Andresen fell out and left. Satoshi Nakamoto, the pseudonymous founder, vanished. Despite these obstacles and setbacks, the dream has persisted.

Within a few years, Bitcoin accrued thousands of users who could send and receive value without a trusted third party, or intermediary. The price of a bitcoin token went from less than a penny to $1 in 2011, to $1,000 in 2013, $17,000 in 2018 and a peak of $67,000 in 2021. Amid this, there were the crashes, such as the crypto winter of 2017, when the bitcoin price fell from about $20,000 to $6,000 within weeks. There was a similar crash in early 2022, with two-thirds of the price again being lost.

The idealism of Bitcoin is about creating better money, or sound money in a digital age as described by the economist Saifedean Ammous in The Bitcoin Standard . Bitcoin appeared after the 2008 financial meltdown, the worst global financial crisis since the Great Depression. Many people were starting to go back to first principles, questioning whether central banks could be trusted to create sound money? Can other people create better money? Does the world really need banks to act as middlemen? Cant I just be my own bank? Questions like these, along with a mistrust of institutions, were the seeds from which Bitcoin grew.

What are the properties of sound money?

Money is usually defined as having three primary properties:

1) Unit of account

2) Medium of exchange

3) Store of value.

Money being a unit of account means we have the ability to measure prices in a consistent way. We should be able to compare goods and services in dollars, euros or sterling. Without it, it might be like prison where you compare and trade cigarettes for bread, books, baseball cards, or whatever is lying around. It would obviously be chaotic, making price discovery next to impossible.